ACA costing 30,000 businesses $4.4 billion in IRS fines

The federal government is penalizing 30,000 businesses an estimated $4.4 billion for failing to comply with the Affordable Care Act, including companies in Charlotte, according to Sen. Thom Tillis (R-NC).

Author:
Nate Morabito

Published:
2:08 PM EST December 5, 2018

Updated:
6:43 PM EST December 5, 2018

CHARLOTTE, N.C. — The federal government is penalizing 30,000 businesses an estimated $4.4 billion for failing to comply with the Affordable Care Act, including companies in Charlotte, according to Sen. Thom Tillis (R-NC).

CPA Stephen Swanick said two of his clients received penalty letters. While he wouldn't share the companies' names, he said one of the fines was more than $100,000 and the other was roughly $500,000.

"When you really see a company with 100 employees have a $100,000 fine, your jaw drops," Swanick said. "I really hope that somebody doesn't wind up losing a job, because their employer did the right thing and the IRS was not able to untangle it."

The Affordable Care Act requires businesses to either offer decent, affordable health care coverage to its full-time employees or owe what's called an employer shared responsibility payment. The federal government previously offered the equivalent of a grace period, giving businesses a pass on compliance before 2015, but now the Internal Revenue Service is sending out letters, trying to collect for the most recent violations from 2015, which include penalties as high as $3,000 per employee.

"I think these are the unintended consequences of a law that provides a lot of benefit, does a lot of good things for a lot of families, but some aspects just haven't been completely thought out," Swanick said.

The IRS started moving forward with the fines in the fall of 2017, according to an agency spokesperson.

Sen. Tillis is a longtime opponent of the ACA. He believes the combined $4.4 billion in pricey penalties will negatively impact the economy by creating "a lot of uncertainty."

"I think it's unfair, I think it's complicated and I think it isn't really providing that affordable care, that access to care that we all want," Sen. Tillis said.

Sen. Tillis continues to push for an alternative to what he describes as a well-intentioned, but poorly executed health care law.

"We're trying to do everything we can to help them and at the end of the day, the only way that we're going to be able to prevent these fines from being imposed is get to the work of putting something in place that is sustainable in place of the Affordable Care Act," Sen. Tillis said.

Companies have an option to dispute their fines. Sen. Tillis is urging any company that's received a penalty to contact his office, so at the least, his staff can make sure the IRS is following the law when it doles out the fines.